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3 Development Phases for SAP Center of Excellence Maturity

May 14th, 2012 by
SAP CoE Maturity

SAP CoE Maturity

Before we get into the substance of HOW TO build a next generation IT organization that is integrated with business a quick review is in order.

Last week’s post on SAP Service Provider to Business Peer Through Center of Excellence Maturity proposed the direct maturity of the SAP IT organization.  The key principle is there are three stages or strata of Organizational Change Management Inside the SAP IT Support Organization These stages create clear distinctions between SAP Service Delivery versus Value Delivery

This week is an overview of the development and maturity details to use SAP as a Change Enabler through SAP Enabled Business Transformation for IT Leadership.  Please keep in mind this organizational development overview is just one component of the Series on SAP Competency Center or SAP Center of Excellence.  The need to continue your Steering Committee Governance for an SAP Center of Excellence cannot be ignored.  Properly formed and instituted your SAP steering committee is a key enabler for business to IT convergence. 

To achieve SAP IT Convergence Beyond Business to IT Alignment requires a senior leader change champion to make this a deliberate and accountable effort.  This is not intended to be a theoretical discussion but instead it is an action plan.  The entire initiative is as a project and needs a project plan, deliverables, key milestones, assigned resources, etc.   All of the structure and processes will need to be defined within your IT organization to move this forward.

SAP Center of Excellence Maturity Development Level 1 – Internal Focus on IT Operations (Service Provider)

Internal focus is an “all hands on deck” effort.  If internal focus, or basic IT service delivery is suffering then everyone within the IT organization must work to ensure your systems are meeting business needs.  You will not gain enough trust of the business community to become a partner or peer until the basic infrastructure works. Some of the key development in this phase includes:

  • A skills matrix
  • IT staff training and development plans
  • Clear SLA requirements
  • Consistent and regular feedback and coaching

Typical activities for service delivery include:

  • Help desk functions
  • Data maintenance
  • Security and authorizations
  • Technical infrastructure (servers, system performance, database maintenance, network, etc)
  • System access (desktop, remote, mobile, etc).
  • Hardware procurement
  • Knowledge (information) base development (Wikis, SharePoint, collaboration tools, etc.)
  • Knowledge transfer to the user community (formal and informal training)
  • Super user development

Skills development focuses on SAP or technical domain competence

  • Application module specialties (SD, MM, PP, SRM, CRM, FI, APO, BObj, etc)
  • Programming languages (ABAP, Java, PHP, etc.)
  • Infrastructure (Cisco, routers, VOIP, IPv6, DHCP, LDAP, etc.)
  • SAP Solution Manager use
  • Effective presentation skills

SAP Center of Excellence Maturity Development Level 2 – SAP IT Integration With the Broader Business Enterprise (Business Partner)

At this stage, depending on the size of your SAP or IT organization, there are 2 levels of leadership here: 1) delivery management, and 2) process management while developing methodologies, tools, templates, and controls.  A key part of the process management is the development of KPI indexes.  Typical activities for business (enterprise) integration include:

  • Requirements gathering
  • Blueprinting
  • System & solution architecture
  • Business case development (cost and value)
  • Knowledge transfer
  • Subject matter expert training
  • Super user training
  • KPI and PPI* development with analytics
  • Project management
  • Team and project leadership
  • Basic supervisory tasks
  • Mentoring, coaching, and staff development
  • Budget adherence
  • Sourcing and supplier management
  • SAP Solution Manager setup and maintenance for project delivery as well as BPM

Skills development focuses on project delivery and management.

  • Facilitation, meeting, and time management skills
  • Project management (training and certification)
  • Managing conflict
  • Supervisory & leadership
  • Negotiation skills
  • Organizational Change Management
  • Total Quality Management
  • Business Process modeling

SAP Center of Excellence Maturity Development Level 3 – Strategic Development Around the Marketplace and Competitors (Business Peer)

Split development track for leaders – 1) product or service engineering support (i.e. the “innovation” track) or 2) sales and marketing (i.e. customer focus).  Typical activities for value added strategic technology convergence include:

  • BPI* development and analytics
  • Marketplace analytics with solution proposals
  • Customer analytics with solution proposals
  • Value analysis – ROI assessment and benefit compliance
  • Cost analysis – TCO assessment and cost savings
  • Business case review for strategic fit
  • Technology roadmap for system & solution architecture
  • System architecture integration with business process management
  • Program management
  • Program & project budget development
  • Project audits / QA’s
  • Mentoring, coaching, and development of level 2 participants
  • Vendor management

Skills development focuses on business drivers, marketplace competitive pressures, sales, and senior leadership.

  • Advertising principles
  • Business statistics
  • Market research
  • Sales management
  • International marketing
  • Sales models
  • Organizational development
  • Coaching and leadership
  • Delegation
  • Strategic planning

Conclusion on SAP Center of Excellence Maturity Development

This analysis provides a framework for development of a world class, fully integrated SAP IT organization.  However, this framework only scratches the surface of a much broader and more important topic–, Organizational Change Management Inside the SAP IT Support Organization.

Communication is One Key to Business and IT Integration

One of the most critical components of a change management program is not listed above in any of the bullet points – developing communication channels.  Maybe this is naïve of me but I would expect that actively and aggressively developing clear and open lines of communication between IT at all levels with the business would be assumed.  Developing an overall communication program and plans is a basic part of any change management initiative.

There is a significant amount of additional guidance for developing your SAP Center of Excellence in the Series on SAP Competency Center or SAP Center of Excellence.  A systematic approach, including key milestones to measure progress against are important elements to success.  To that end I hope this framework contributes to the dialog and direction of future SAP IT organization maturity.

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* An upcoming post in the future will look in detail at this concept of “KPI, PPI, and BPI” as Key Performance Indicators, Process Performance Indicators, and then finally Business Performance Indicators.




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ERP vs. ERP II vs. ERP III Future Enterprise Applications

May 31st, 2010 by

ERP vs ERP ii vs ERP iiiERP I, ERP II, & ERP III Abstract

ERP applications integrate enterprise operations within and across enterprise legal entities, or company codes.

ERP ii (or ERP 2) applications extend supply functionality to external enterprises (generally vendor-affiliated companies or enterprises) to reduce cost, improve supply chain efficiency, and to perform collaborative innovation. 

ERP iii (or ERP 3) enterprises go to the next level of integrating the ERP and ERP ii functionality to include customers and the sales side of the marketplace into enterprise operations.  Your customers become active participants in your business.

Moving To the Border-less Enterprise

I’ve heard and read lots of material about the enterprise applications and what the next generation of ERP is.  Some have suggested that ERP systems were just manufacturing tools (see e.g. ERPwire article on major differences between ERP vs. ERP ii).  Some suggest ERP ii systems were little more than an extension of ERP functionality to new industry sectors.  In my opinion this is a completely misplaced assessment.  Changing industry sectors does not change what an ERP application does so a broader definition is more appropriate.

Before we go into the details and background of each of the 3 generations of enterprise applications here are my definitions for ERP, ERP ii, and ERP iii systems:

ERP Definition

An ERP (Enterprise Resource Planning) system integrates virtually all operational business functions and processes and automates entries to finance and reporting within the enterprise (the legal entity or entities that make up an entire company no matter where its operations are).  ERP systems focus almost exclusively on operational excellence value propositions of process efficiency and automation.

ERP II (or, in other words second generation ERP, ERP 2) Definition

Through collaboration, SOA, and other interface, data exchange, or interaction methods the ERP ii systems move beyond Enterprise boundaries (or a basic ERP system) and into the vendor space including the supply, design, and engineering collaboration areas. ERP ii systems continue to enhance operational excellence and start to introduce a measure of the innovation value proposition.

ERP III (or, in other words third generation ERP, ERP 3) Definition

Through collaboration, direct contact, social media, and various data streams within and outside of the enterprise ERP iii integrates marketplace fans and critics into the extended ERP and ERP ii organizations.  From this integration of the customer and vendor a constructive dialog and exchange of information is created to innovate, produce, and then sell / distribute better products or services.  This closes the value proposition loop by going outside of the enterprise boundaries and finding ways to bring customer input, needs, wants, and insight into the enterprise.  ERP iii system create a strong synergy between innovation and customer focus.

ERP System Definition or ERP Defined

The acronym ERP literally stands for “Enterprise Resource Planning.”  And this is exactly where I disagree with the ERPwire definition proposal.  Just a manufacturing system is not an “enterprise” system at all.  It is merely a manufacturing system, or an MES (Manufacturing Execution System).

As the university studies and academic literature note, ERP systems are “a single instance of data, a full process chain of dependencies” (see Change Management Strategies and Knowledge Transfer Processes for a Successful SAP Project citing Kallinikos, 2004).

In the ERP industry we (consultants and integrators) frequently refer to any ERP system as a type of “back office” application or system.  By “back office” we are referring to company centered business functions into a single database, or, a single “system of record.”  “Back office” processes are fully within the border and boundary of the enterprise.

In 2000, in an article addressing ERP ii, Gartner noted that they had defined ERP in 1990:

In 1990, Gartner defined ERP, establishing a new vision for the resource planning domain. That vision centered on resource planning and inventory accuracy, as well as visibility beyond the plant and throughout the manufacturing enterprise, regardless of whether the enterprise was a process manufacturer, discrete manufacturer or both. ERP has since appeared in different “flavors.” Extended ERP reflected the fact that many nonmanufacturing industries turned to ERP systems for “backbone” financial transaction processing capabilities (Bond, et. al., 2000 pg. 2, note 2).

That article went on to note that the accepted definition (in 2000 and beyond) had become:

Despite [the] original definition, ERP has become the accepted term for back-office transaction processing systems, regardless of the industry or region (Bond, et. al., 2000 pg. 3).

The definition I have provided is as comprehensive as the original Gartner proposal and includes the later understanding of the application to more industries and business functions.

ERP Focuses on the Operational Excellence Value Proposition

To understand the operational excellence perspective see the more detailed explanation of the functions and operations of an ERP system like SAP under the section “What is SAP?” ( http://www.r3now.com/define-sap ).

I generally try to categorize all system efforts and business functions into one of three “value proposition” buckets:

  • operational excellence (ERP),
  • innovation (ERP ii),
  • and customer focus (ERP iii).

The ERP context is almost exclusively focused on the “operational excellence” portion of business “back office” transactional processing.

ERP vs. ERP ii — What is ERP ii?

The next generations of Enterprise applications, or ERP ii systems, extend the “back office” ERP system processing to the extended supply chain.  They extend the enterprise into the supply chain outside of their legal entity borders as an active participant. This would include VMI (Vendor Managed Inventory) processing and KANBAN type demand and supply signals to vendors for JIT (Just In Time) stock management.  But it goes far beyond that, it is the “innovation” portion of the value proposition that is addressed here.

SAP includes ERP ii type extended supply chain applications like SRM (Supplier Relationship Management), APO (Advanced Planning and Optimization), and PLM (Product Lifecycle Management) to help move the supply chain beyond the enterprise borders.

ERP II Creates Collaboration Hubs Beyond Planning and Distribution Functions

Together with the extended supply chain applications there are a number of various exchanges such as common catalogs that are published to the web and integrate with their customer ordering.   Some examples of external exchanges can be seen in initiatives such as “Covisint” for the automotive industry, or Grainger’s online catalog system (although it is not a competitive based platform like Covisint), and many others.

One of the key functions or features of ERP ii systems is supply chain or vendor collaboration, which extends to engineering design and development.  Most enterprises using SRM systems use this to focus on cost reductions, vendor competition, and supply chain efficiencies.  They are generally geared to the operational excellence system domain but there is a LOT of untapped possibility.

The highest and best use of ERP ii functionality includes active collaboration with vendors to reduce cost, improve quality, reduce extended supply chain cycle times, and even co-engineer (or co-develop) better products and services.

Many ERP ii solutions now include some type of built-in “reverse auctions” where companies can place requirements out for competitive bids in various formats.  These exchanges might include data interchange methods such as EDI (Electronic Data Interchange) or other standards compliant communication protocols, but they are much more, they are active collaboration hubs.  Together with these collaboration hubs, SOA extensions are being used to extend collaboration and engineering design work to the extended supply chain.

How Has SAP Implemented ERP ii System?

SAP has created an entire collaboration network called the SAP Community Network or SCN (http://scn.sap.com) where customers, vendors, consultants, and any interested party can exchange information, ideas, or dialog.  SAP has implemented ERP ii systems internally through the development of specialized vendor partnerships it calls an “Ecohub” (http://ecohub.sdn.sap.com/).  This is a place where vendors, partners, or other firms with specialized SAP solutions can integrate and promote their offerings to enhance SAP’s various software offerings.  Along with that there are code exchanges, “how-to” articles, discussion forums, and many other types of collaborative information exchanges.  This is similar to what I proposed a few years ago when I wrote “SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration.”

Operational Excellence and Innovation Value Propositions

ERP ii systems integrate the external vendors and suppliers into enterprise processes so that they can directly impact productivity, cost, and efficiency.  Some elements of ERP ii include engineering staff augmentation, free or at a very reasonable rate to the “customer company,” and as a value added service from vendors.  For vendors the ability to augment engineering functions can mean customer retention; for the customer companies this may mean higher quality and lower cost products or services.

SAP’s ERP offerings include PLM (Product Lifecycle Management) with CAD integration for several off the shelf CAD programs.  Although the PLM functionality is primarily used for internal engineering processes it can be pushed out into the extended supply chain for collaborative engineering and design.  That collaboration can be used for innovation if it is properly structured and implemented.  This is in conjunction with other integrated application offerings such as SRM and APO.

By extending engineering or collaboration functions outside of the enterprise, but still within the supply chain, innovation can be introduced into the ERP ii enterprise (see the entire series on Process Execution of Business and IT Innovation).   However, the primary feature of ERP ii systems is the additional operational excellence that is brought about by extended supply chain processing.  Very few companies have succeeded at collaborating with the extended supply chain by introducing extended engineering capabilities, or vendor insight to produce significant innovation.  Most ERP ii systems only work to extend the supply chain beyond the boundaries of the enterprise for cost savings and efficiencies (operational excellence).

Using SOA (Service Oriented Architecture) for Creating ERP ii and ERP iii Enterprises

The promise of ERP ii system success that moves toward ERP iii (discussed in a moment) is SOA or Service Oriented Architecture.

In layman’s terms, SOA is the ability to create a set of “talking points” from any internal system to external systems. 

They are the data structures and data schemas that are published for other systems to interact with and begin to create the framework for the “borderless enterprise.”

ERP iii Defined, What is ERP iii and How Does it Go Beyond ERP ii?

ERP iii addresses the final domain of enterprise class applications by addressing the customer focus value proposition.  It is the extension of technology capabilities which brings collaboration with customers and the broader marketplace into the enterprise system.  This goes way beyond what we currently refer to as CRM (Customer Relationship Management) systems of today.  Today’s CRM applications still operate within the walls of the enterprise and are generally used for managing the sales force rather than moving the enterprise out into the wider marketplace and to direct interaction with customers.

ERP iii from a high level is fairly easy to define, however what it looks like in a few years is difficult to predict.  The areas that ERP iii touches are in a rapid state of change because of the dynamic nature of social media and the global marketplace.

ERP iii Defined

  • ERP applications integrate enterprise operations within and across enterprise legal entities, or company codes.
  • ERP ii applications extend supply functionality to external enterprises (generally vendor-affiliated companies or enterprises) to reduce cost, improve supply chain efficiency, and to perform collaborative innovation.
  • ERP iii enterprises go to the next level of integrating the ERP and ERP ii functionality to include customers and the sales side of the marketplace in general.

The end state of the ERP iii enterprise would include a dialog between customers (and potential customers), the ERP organization, and the extended supply chain so that even suppliers would participate in the sales side of the marketplace.  Because there is little or no information in the marketplace about ERP iii direction and design I am offering a more detailed definition here:

Through collaboration, direct contact, social media, and various data streams within and outside of the enterprise ERP iii integrates marketplace fans and critics into the extended ERP and ERP ii organizations.  From the integration of customers and vendors beyond the enterprise boundaries a constructive dialog or information exchange is created to innovate, produce, and then sell (or distribute) better products or services.

ERP iii will create the “borderless enterprise” by bringing together a host of technology sources such as:

  • Collaboration tools (within the enterprise and across the supply chain and marketplace)
  • Social media
  • Internet technologies
  • SOA
  • Smart information integration and synthesis (specialized search with analytics or within specific information domains).  An early example of this type of search is a web service called “Lijit.”  Lijit allows you to manually assign searchable information sources for a customized, high value “search engine.”
  • Extended marketing analytics that are “like” tracking cookies but less invasive and use additional sources of information and research beyond the web (a good example is like grocery store checkout programs that automatically print coupons on the back of your store receipts based on what you just purchased).
  • Direct customer collaboration (we see early examples of this in the Dell “designed by me” and “I made Windows 7” television commercial marketing campaigns).

The Future of ERP iii Systems

Within the extended SAP enterprise (which is my area of expertise) I see many of the seeds of ERP iii germinating and beginning to grow.  Even though the initial “green shoots” are there for an ERP iii revolution I don’t anticipate that occurring for several years within SAP.

Today SAP has:

  • Very active, country specific SAP User Groups (xSUG, in America is it ASUG) with “influence councils”
  • Community forums (previously mentioned)
  • “Mentor Groups” within the community network.

While these all contain the seeds of ERP iii outlets I do not see a lot of the raw material being converted into application enhancements to directly address business marketplace demands.  There are still way too many technical solutions and not enough for genuine business needs.

ERP iii integrates marketplace fans and critics into the extended ERP and ERP ii organizations to innovate, produce, and then sell (or distribute) “customer-centric” products or services.

I doubt that the integration of more social media will move the ERP iii needle much further.  SAP like any other company that embarks on this type of transformational exercise must begin to use their well established outlets to drive innovation and to meet marketplace requirements (see the entire series on Process Execution of Business and IT Innovation).

Social Media and ERP iii

Social media outlets like Facebook, Twitter, and other resources will need to become more sophisticated to produce meaningful differences in business-centered innovation or customer focus.  That sophistication for business will mean finding a means to use those outlets for genuine business competitive advantage.

It will take business some time to find new ways to tap into the collective marketplace consciousness through social media in spite of the massive number of what I refer to as “snake oil” salespeople.  Social media in the enterprise will not be useful until the snake oil sales finally align actual business needs to areas of the enterprise (sales, marketing, HR recruiting, etc.) that align with business goals and directions (see Social Media Fads and the Risk to the Enterprise).

Before ERP iii systems are ready for the extended marketplace and for customer interaction it will require “back office” integration with social media (see ERP III – Is the Integration of Collaboration the Future of Enterprise Applications).

As social media and collaboration tools mature over the next 10 or more years then corporations will finally build the ERP iii systems for integration into the wider marketplace.  By then the ERP ii systems will have finally matured to the point that some of them can provide meaningful integration between the enterprise, the entire supply chain and the sales side of the marketplace in general.

ERP, ERP ii, and ERP iii Conclusion

Considering this specialized class of business systems through the lens of the high level value propositions of

1) operations,

2) innovation, and

3) customers;

here is my summary:

ERP (Enterprise Resource Planning)

Primarily focused on the “back office” with a heavy emphasis on operations, automation, cost control, financial activity, and lagging business indicators of performance.

ERP ii (the second generation of Enterprise Resource Planning)

Extends “back office” processing functions and operations into the extended supply chain with a heavy emphasis on supply chain automation, additional efficiency, more cost control, and some vendor collaboration for limited innovation.  This area of the application moves into the “last mile” of improvements that can be more expensive to implement and yield lower returns.  However, carried out properly with significant supply chain collaboration and joint engineering or development efforts this can provide new / innovative products or services addressing both lagging indicators of cost control and efficiency while exploring leading indicators of new products or services.

ERP iii (the next generation of Enterprise Resource Planning)

This will encompass the integration of social media with new marketplace intelligence and analytics into the ERP ii enterprise.  With a very simply “hub and spoke” idea, the enterprise will constitute the “hub” and the extended supply chain vendors, engineers, and designers, together with customers and market analysis as some of the “spokes.”  This will be enabled by the ERP application that is extended with collaboration and social media tools.  The ERP, ERP ii, and ERP iii functions will all be integrated with new analytics and “smart source” search methods to integrate and synthesize trend, market, and product or service information.  This will close the loop on the ERP ii innovation and will bring a new customer focused business paradigm into the enterprise that goes far beyond today’s CRM applications.

ERP iii state companies will be marketplace disrupters who are agile, nimble, and global.  They will be able to spot emerging trends and unmet customer demands (needs or wants) far more quickly and with greater ability than their peers.  From those trends and customer needs these companies will be able to quickly execute innovation programs to develop new products and services to quickly fill those customer demands.  The most advanced of these new “disruptive innovators” will be the companies who can intelligently synthesize all of the various data points to understand customer demands that are not even articulated.

======================

Bond, B., Genovese, Y., Miklovic, D., Wood, N., Zrimsek, B., and Rayner, N. (2000). ERP Is Dead — Long Live ERP II; Gartner Publications.

Kallinikos, J. (2004), “Deconstructing Information Packages. Organizational and Behavioral Implications of ERP Systems.” Information Technology and People, Vol. 17, No. 1, pp. 8-30.




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Striving for a Customer Focused Approach to Innovation 3 of 3

April 5th, 2010 by

Where is the market goingIn the first two parts of this series we looked at the current innovation paradigm.  That paradigm consists mostly of two primary approaches being an incremental one that looks more like continuous improvement and a free for all that is more like chaos.  We also looked at a possible approach to innovation by leveraging existing marketing infrastructure to produce a future state narrative.  That narrative acts as a future state blueprint for product or service development to move toward. 

Innovation Begins with Customer Collaboration

 Customer collaboration is more than surveys, polls, focus groups, or social media input.  Even though these can all be components of a collaboration strategy, several of the approaches are one way when what is needed is a customer dialog and customer engagement.  Outlets like Twitter, Facebook, or some type of forum software help create a dialog but if a company is not ready to hear the truth about their products they may be in for a shock.  For example, see the second half of the following post under the section entitled “A Technology Change that will Force You to Work More Closely with Customers .“

For any company that does not already have an open forum it will be critical to add this to your application portfolio.  This external forum is the first real bridge to customer integration.  Full collaboration integration into ERP applications like SAP is possible by taking a focused approach to how the application is used (SAP, ERP III, SOA — Learning Organizations through Social Media Collaboration).  Properly deployed collaboration tools do not need to be expensive, complicated, or difficult and properly implemented they can transform organizations (ERP III – Is the Integration of Collaboration the Future of Enterprise Applications).

SAP has been very successful at creating a pair of portals which integrate customers, consultants, and vendors into the process and product development through its customer ASUG (Americas SAP User Group), SCN (SAP Collaboration Network), and their partner Eco System (vendor participation).  These are all tremendous examples of how SAP as a company is integrating meaningful social media tools and collaboration initiatives fully into the Enterprise. 

Just how successful is this? 

Although media outlets made a huge issue out of the ASUG based “rebellion” of the customer base over SAP’s proposed maintenance fee increase, it is a testament to the importance and power of collaboration with end customers.  Although SAP may have considered the backlash over maintenance fees a failure, it should be considered instead as satisfying customer expectations.  After all, the global economy has been struggling, competitors like Rimini Street have targeted application support, and customers have long questioned what they get for the support.  A successful press to increase maintenance fees would have likely led to wholesale defections of customers to Rimini Street and would have created a massive market opportunity for other support vendors.  The mass defection to support vendors like Rimini Street could have easily cost far more than just the lost maintenance fees, it could have cost significant upgrade revenues as well.

What can You Do to Create Customer Focused Innovation?

The first and most obvious place to start is to glean a measure of customer intelligence to understand their frustrations with the current marketplace and their desires (Business Strategy and IT Strategy to Reproduce Apple Innovation).  Some type of forum, or other discussion mechanism freely available to customers for feedback is a good place to start.  Company managers and employees should be required to participate in those forum discussions to begin to gain greater insight into the customer perspective, including their frustrations, desires, and concerns.

From that exchange many of the customer drivers can be derived to begin assembling the innovation narrative around new products or services, or around significant improvements to existing products or services. 

The thing to remember here is that you don’t have to create the “miracle” product or service.  You don’t even need to create the product or service that meets the “ideal state,” you only need a product or service that is noticeably better and different than your competitors.  Within the framework of the narrative you can continue to move your products ahead by making them more and more like the “ideal state” narrative over time.

Great Employees Make for Great Customer Experience

Facebook as an Inexpensive Marketing Outlet and Employee Recruiting Tool

Facebook may work well as an inexpensive marketing channel for promotions and offers.  As such, properly constructed, you might be able to “train” an extended customer base to visit Facebook for new offers or promotions.  However, I personally see a different application for Facebook in particular.  I believe its utility is best served as an employee recruiting tool.

Tools like Facebook have a legitimate place in the enterprise even though a recent Harvard Business Review case study demonstrated that their use for businesses with huge customer bases is limited (Social Media Fads and the Risk to the Enterprise).  They do serve a purpose if properly connected to a specific business purpose.  Toward that end, Facebook in particular can generate a “tribe” of loyal customers who might make the best pool of potential employees to recruit from.  What the Harvard study showed was that Facebook was most likely to attract those who are already fans, and who would make the best employees of your company?  True fans as employees are far more likely to be satisfied and far more likely to produce a good customer experience for others as your employees.  They are also much more likely to defend the brand and to actively engage in meaningful dialog with customers to understand where there might be opportunities for innovation.

Conclusion

I’ve provided a few examples and a starting place for a framework for customer focused innovation.  As I previously laid out in a post entitled “From Collaboration to Innovation to Market – Toward a Working Model” there is a rational approach to innovation in the enterprise:

Conceive

  • Collaborate (technology integration)
  • Gather intelligence and research
  • Ideas (customer immersion narrative)
  • Socialize (customers, employees, other stakeholders)

Develop

  • Prioritize (emerging trend or fad)
  • Prototype (mock-ups, story boards, paper prototypes, actual working models)
  • Pilot (finalize design, costing, materials or talent, etc.)

Market

  • Market trial
  • Refinement
  • Sales Campaign

This collection of posts has been an initial attempt to bring some definition or a starting framework to an area that has little guidance and little academic research.  The whole area of innovation seems to be a black box to most.  This has been a bit more of a challenge than I had originally expected and I expect that as I continue to toy with these ideas and approaches that something more concise will eventually emerge.  To that end I would be curious about your feedback and input if you have been so courageous as to look through the material.

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